PepsiCo Optimizes Production Network: Plant Closures in Response to Changed Consumer Behavior

PepsiCo has announced the closure of three more bottling plants, resulting in the loss of more than 300 jobs. This measure is part of the beverage giant's strategy to make its production network more efficient. The affected locations are Cincinnati, Harrisburg (Pennsylvania), and Atlanta. In Cincinnati, 136 employees will lose their jobs, in Harrisburg, 127, and in Atlanta, fewer than 50 people will be affected. However, the warehouses at these locations are to remain operational. These closures come just three days after the abrupt shutdown of a plant in Chicago, which employed 131 people. The reason for the restructuring, according to PepsiCo in a statement, is the investment in a more agile and optimized production network to better respond to the dynamic needs of consumers. PepsiCo has also downgraded its revenue forecast for the year, as consumers are buying fewer beverages and snacks in the face of rising prices. Beverage demand in North America has decreased by 3.5% through 2024. Other companies like Flowers Foods, Del Monte Foods, and Conagra Brands have also announced plant closures. Despite these measures, PepsiCo is expanding elsewhere: A new 1.2 million square foot production facility is being built in Colorado, which will be the largest in the United States for the company, albeit with delays. This move is part of the company's effort to optimize its production networks and adjust capacity to demand.